1997 (8) TMI 217 - AT - Central Excise

Summary

Issues:
Recovery of erroneously refunded amount; Competency of Adjudicating Officer to issue Show Cause Notice for recovery of refund; Power of Adjudicating Officer to review own order.

Analysis:
The departmental appeal stemmed from an order-in-appeal where the Collector (Appeals) set aside the order-in-original of the Asstt. Collector and sanctioned a refund of Rs. 4,82,593.69 to the Respondents. The refund was granted based on the differential duty paid by the Respondents on their product, Glucose. The Asstt. Collector had earlier held the refund as bad in law and ordered its recovery. However, the Collector (Appeals) reversed this decision citing relevant legal precedents.

The Department contended in its grounds-of-appeal that the Collector (Appeals) erred in setting aside the adjudication order and treating the Show Cause Notice and subsequent order as a review of the earlier decision. The Department argued that under Section 11A, the proper officer could issue a Show Cause Notice for recovery of erroneously refunded amounts. The Department relied on various legal decisions to support its stance that the Assistant Collector was within his powers to issue the Show Cause Notice under Section 11A.

On the other hand, the Respondents argued that there was no erroneous refund by the Assistant Collector as the provision related to unjust enrichment was not in effect at the time of the refund. They contended that the Assistant Collector did not have the power to review his own order and issue a fresh Show Cause Notice under Section 11A. The Respondents cited legal precedents to support their argument that the Assistant Collector lacked the authority to review his own decision.

The Adjudicating Officer, in his analysis, addressed the issue of whether an Adjudicating Officer could issue a Show Cause Notice for the recovery of a refund previously adjudicated by him. He noted that legal precedents, including Supreme Court and Tribunal decisions, established that an Adjudicating Officer did not have the power to review his own order. The Adjudicating Officer emphasized that the proper remedy in such cases was for the higher authority to examine the legality of the decision and direct necessary actions under Section 35E(2) of the Central Excise Act. Citing specific cases, the Adjudicating Officer concluded that the Assistant Collector could not review his own order, and the only course for the Revenue was to settle the claim after scrutiny, not by reopening the case with a Show Cause Notice.

Ultimately, the Adjudicating Officer found no merit in the Department's appeal, stating that the impugned order had no legal flaws. Therefore, the appeal was rejected without delving into the merits of the unjust enrichment contention raised by the Department.